Guide for 1099
What the heck is a 1099 and who needs to send or receive one?
Any individual, sole proprietor or LLC who received over $600 from a person or business in a calendar year needs to receive a 1099 in order to properly claim the income on their taxes. 1099 work is often referred to as contract work or freelancing but the truth is, even your family babysitter should be getting a 1099.
There is one exception (and it’s a big one!!), if you get paid through a payment processor (like PayPal, Stripe, Quickbooks, etc) then you only need a 1099 if you received less than $20k in deposits or 200 transactions. Get more than that and you’ll be receiving your 1099 direct from the payment provider.
If you need a 1099:
Provide the payer with a W9 now. You'll need your Tax ID/EIN number handy for this form along with your name and address. You’ll also need to sign the document so might want to make sure you’re near a printer - you can use your phone to scan it back in afterwards.
If you need to provide a 1099 to someone else:
Ask them for their W9 now. If you’re not sure if they need one or not, ask! It doesn’t hurt and by asking now instead of leaving it until the end of January, you’ll hopefully be more organized and ready for the Jan 31st deadline.
If they supplied you with one last year, ask for an updated one as business type, numbers and addresses can change.
Side note… ideally the contractor should send this to you as soon as they hit $600 through the year so don’t think you have to wait until December to ask for it.
You can absolutely complete your own 1099's or you can have someone else efile them. The benefits here include an audit trail and proof of receipt.
Here are the 1099 packages that I offer:
1-10 $10 each (minimum charge of $30)
11-20 $8 each
21+ $5 each